A house under Chapter 7 vs Chapter 13

The U.S. Courts pages do not give one nationwide yes or no. They split the question into exemptions, liens, and which chapter you filed.

Exempt property and the trustee

The Chapter 7 basics page says a trustee liquidates property that is not exempt. You file a schedule of exempt property. Federal law lets you protect some property. Many states have replaced that list with their own. In some places you may choose the federal package or the state package.

Whether a house is exempt, and for how much equity, is often a question of the state where you live. This site does not publish a homestead dollar amount because that figure is not one number for the whole country.

If the house is fully exempt, or the equity after the mortgage and the exemption leaves nothing for unsecured creditors, a Chapter 7 case can be a no-asset case. If there is nonexempt equity, the trustee can sell the house, pay the mortgage and the exemption, and use the rest for creditors.

The mortgage still has a lien

A Chapter 7 discharge releases personal liability on most debts. It does not extinguish a lien. The lender can still look to the house if payments stop. If you want to keep a car or another secured item, the same page describes reaffirmation: a new written promise to stay liable, signed before the discharge, with disclosures the Code requires.

Reaffirmation of a house is a legal choice with its own hardship test. Ask a lawyer before you sign that paper.

How Chapter 13 treats a foreclosure

The Chapter 13 basics page says a particular advantage of Chapter 13 is the chance to save a home from foreclosure by catching up past-due payments through the plan. The automatic stay stops the foreclosure when you file. You must still make the regular mortgage payments that come due during the plan.

You can still lose the house if the foreclosure sale finished under state law before you filed, or if you miss those post-filing payments. Will filing bankruptcy stop collection calls? explains the stay in more detail.

What a lawyer is for

The Filing Without an Attorney page lists this as one of the questions a lawyer should answer: whether you will be able to keep your home, car, or other property after you file. What's the difference between Chapter 7 and Chapter 13? is the chapter comparison. What to do when you can't keep up with the bills is the filing order.